A new guide has been published to help businesses achieve optimal cash flow through Brexit
Two leading business organizations – the Chartered Institute Of Credit Management (CICM) and Federation of Small Businesses (FSB) – have come together to create the guide, titled Managing Cash Through Brexit.
The guide outlines the basic principles of cash flow and credit management, and it is hoped to help businesses successfully navigate the period of economic uncertainty.
In the guide, you’ll find a series of questions to help assess your company’s current risk profile, and it offers a list of ten tips to help manage cash. These include:
- Maintaining good customer communication.
- Documenting agreed payment terms.
- Checking customers’ standard payment terms.
- Consistently reviewing budgets and cash flow forecasts.
- Implementing standard processes for following up invoices.
In addition, there’s advice about how businesses can protect themselves against retrospective changes to terms that could be problematic for a supplier. There’s also information about how the Prompt Payment Code can be used to challenge poor payment practices.
Commenting on the new guide, Philip King, chief executive of the CICM, explained that sticking to the basics is always a good idea, but it’s even more important during times of change. “Fixing the roof while the sun is still shining will help to head off potential issues in the future,” he said.
The CICM is the largest recognized professional body in the world for the credit management community. It also administers the Prompt Payment Code on behalf of the Department for Business, Energy & Industrial Strategy.
Mr King also noted that continual review of your customers and the market is essential: “Assessing your customers’ plans post-Brexit, and understanding your role within the supply chain, is critical to future prosperity. This means being thorough and organized, with documented processes and terms, and understanding where help is available should you need it both now and in the future.”
“Fixing the roof while the sun is still shining will help to head off potential issues in the future. – Philip King, CICM
Managing cash through Brexit is the latest in a series of helpful guides that have been released by the CICM – they are all available to download from the organization’s website.
Mike Cherry, national chairman for the FSB, explained that there is a high level of late payment to businesses, and this is especially a problem for small businesses where the average value of late payments stands at £6,142. He says that if all payments were made in time, 50,000 more businesses could be kept open, and it would add a £2.5 billion boost to the UK economy.
“We are now working closely with the government to ensure its proposed corporate governance reforms ensure that supplier interests are represented at the board level in large firms. We’re also delighted to work with CICM to produce this helpful guide for small businesses, so they understand current measures available to help them ensure they receive payments on time,” he added.